February 4, 2023

Bazar Lead

Just Law & Legal

Why Form an LLC? So You Can Adapt Like a Chameleon to the IRS

LLC vs S-Corporation…

I wish I could JUST have both!

I Can?

What your accountant is too busy to tell you around tax time is that you form as an LLC and pay taxes like a corporation! The biggest complaint I hear everyday is, “well this person REALLY recommended I form a corporation”. Well, that “person” never usually has a name, and that argument never has a point.

An LLC is structured to protect you just like a corporation, same deductions as a corporation, no pointless annual meetings forced by the State, no shareholders that must have input on decisions (LLC’s are owned by a percentage as outlined in the operating agreement) and less paperwork than a corporation. Jeez, I’m getting worked up just telling you how easy it is.

Then why do people still form corporations?

If you are in the situation where you are looking to raise money for a business venture then, yes, a corporation protects your money-man (sorry feminists, but it always IS a man) by letting him own shares and having a say in the day-to-day business activities…

LLC PROTECTIONS

You never know when someone is going to come out of the woodwork and try to sue you. People today sue for the oddest reasons and yes sometimes they do win. So, how is an LLC going to help protect me?

If you run your business out of your LLC and the business’s only assets are your car and office equipment, then the person trying to sue you only has so much he can go after.

FOR EXAMPLE: If a Landlord has a Tenant that slips and falls one morning because the driveway was not shoveled after a snowfall (this is one of the most common cases running) then the only assets he can go after is whatever is in the LLC. Personal Assets such as your house, personal savings accounts, stock, etc are all protected by the shield of LLC.

What if I owe more than my LLC is worth? Well, if you file bankruptcy, it is just the LLC that files, NOT YOU! That is why Donald Trump’s companies have filed bankruptcy before but he personally has never filed (why do you think he still has everything)

So if I haven’t convinced you yet, you must have a pretty size-able person funding you because there is no other reason you should be incorporating